Dark Fibre Africa expands into Zim amid acquisition rumours

Dark Fibre Africa expands into Zim amid acquisition rumours

Dark Fibre Africa (DFA) has confirmed the launch of its business in Zimbabwe as it looks to expand its business beyond South Africa and extend its existing 10 000km fibre network.

Vino Govender, Acting Chief Strategy Officer at DFA said the Zimbabwe business was established last month in response to growing demand for fibre connectivity

“You’ve got to look at any market from a business opportunity perspective before going in, and that is what we do. We’ve got a set way through which we evaluate opportunities based on the current regulatory environment and market potential, and the risk outlook. Many of the countries also require us to get a local partner and we always try to find one that is capable before going into a country. While we have now entered Zimbabwe, there are other countries in Sub-Saharan Africa that we are currently evaluating before moving even further.”

Govender said that while the change to Zimbabwe’s political leadership did influence the company’s decision to enter Harare, a clear increase in demand carried more weight. “The demand is currently in Harare because that metropolitan area has a lot of business services and a lot of concentration of people due to urbanisation. Those people consume a lot of mobile, voice and data services and that places a big demand on transmission infrastructure. There are many businesses in Zimbabwe that require ISP services including the mobile operators. Mobile money has become a huge service, along with other e-payment services and that has increased the demand for more bandwidth.”

Govender added that there are still growth opportunities in South Africa.

“We are just touching on the edge of digital transformation (in South Africa). We are still going to see the deployment of technologies such as edge computing for example which we are well-positioned for. We haven’t even touched on the potential of autonomous AI and mass scale adoption. Digital virtualises anything and we are positioned to grow on the back of that. We will continue to grow in the South African market, but we are looking for markets with low maturity to entre at the early stage so that we can tap into growth in other regions.”

Cost management

Thinus Mulder, CEO of DFA said as the company looks to expand its reach in Africa, the costs of fibre roll out continue to escalate.

“The cost is currently R800 a metre and it cannot really come down because it is labour driven. We do manage to bring the costs of the material down, but the labour component keeps going up because of the minimum wages et cetera.”

Mulder confirmed that DFA, a founding member of FTTH Council Africa, works with some competitors to help reduce the duplication of trenches in a bid to lower costs – especially as more companies enter the fibre connectivity market.

“We work with anybody who already has a trench to do some swapping, look at bilateral agreements and bilateral leases. As an industry we try to work together to ensure that we do not increase capex costs which are the most expensive part.”

Neither Mulder nor Govender would comment on speculation of ongoing talks to sell DFA for close to R10 billion to Internet Solutions.